Labour productivity still low

Update:
May, 07/2016 - 09:00

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Director of the Việt Nam National Productivity Institute, Nguyễn Anh Tuấn, spoke with Hải Quan (Customs) newspaper about the reasons for low domestic labour productivity and ways it can be improved in the near future.

The Vietnamese are assessed to be hard working and dedicated labourers, but our labour productivity remains lower than other countries in the region. What do you think about this?

Việt Nam is one of three countries that rank lowest in terms of labour productivity in the Association of Southeast Asian Nations (ASEAN) bloc. Domestic labour productivity has steadily risen 3 per cent each year since 2000, especially in fields of industry and construction. Although this is helping to narrow the gap in labour productivity between Việt Nam and other ASEAN countries, the gap between Việt Nam and developed countries is still wide.

Many surveys have show that employers do not evaluate Vietnamese labourer working skills as low. However, they lack capacities for communicating, adapting to working environments, obeying work regulations, team work, logical thinking and other necessary soft skills in dealing with situations at work.

So, what are the reasons?

There are a range of reasons behind the country’s low labour productivity. First, we fail to take advantage of science and technology. Only when we make use of advanced technology to manage labour productivity will it improve.

Second, impacts from the market add to the situation. For examples, in several sectors, output is unstable, and this also results in low labour productivity. Another reason causing low labour productivity is complicated administrative procedures that companies have to face. Low labour productivity is partly due to employers, when they do not install modern and hi-tech equipment for labourers for example. Some employers fail to encourage their labourers to have ideas about raising labour productivity.

What should we do to boost domestic labour productivity?

To do that, the country is required to focus on three factors: capital, science and technology, and human resources. Việt Nam is a developing country, so at this stage, investment capital plays a key role in economic growth. The more we run low-productivity sectors, the lower our nation’s labour productivity will stay. Hence, pouring more capital into install advanced equipment and improve management skills is highly recommended.

We should learn from the experiences of other countries on how they enhanced their labour productivity. Japan is one good example. They really succeeded in doing that in the past.

For example, in 1950s, the quality of made-in-Japan products was not as high as now. After research, Japanese experts designed models to raise their labour productivity and the quality of their products. These were the 5S and Kaizen models. [The 5S model is one of several lean manufacturing tools designed to improve workplace efficiency through facility-wide organisation and cleanliness. 5S was developed in Japan and stands for the Japanese words seiri (tidiness), seiton (orderliness), seiso (cleanliness), seiketsu (standardisation) and shitsuke (discipline). Kaizen is the Japanese word for ’continuous improvement.’ Kaizen methods can be used to improve the results of any firm and can be used in your personal life. Kaizen is used to describe a company culture where everyone, from the CEO to the front desk clerk, regularly evaluates his or her work and thinks of ways to improve it. The concept is that small steps on a regular basis will lead to large improvements over time.]

There is one rule that we need to remember in order to boost our labour productivity. It is raising wages for labourers and providing them better welfare.

Applying science and technology is very important to enhance labour productivity. However, for small- to medium-sized enterprises, they do not have enough capital to invest. Could you give some advice to them?

Enterprises, especially small- to medium-size enterprises, have to identify which issues related science and technology they need to invest in. It is momentous for them to calculate how much interest they gain when they pay one đồng to invest. That is the most important thing for encouraging and motivating them to invest in science and technology.

Surveys have discovered that many enterprises are confused about identifying which issues related science and technology they should put money into. They are advised to carefully assess the demands of customers and the market, and how much money customers can afford to pay to buy their products. Then they should build a roadmap to get the highest effectiveness from their investments. – VNS